Five banks must divulge info on alleged tax dodgers: U.S. attorneys

Reuters Staff

2 Min Read

WASHINGTON (Reuters) - The Internal Revenue Service has obtained court orders to force five U.S. banks to divulge information about U.S. account holders who allegedly hid money with banks based in Switzerland and Bermuda to evade taxes, federal prosecutors said on Tuesday.

In two “John Doe” summonses authorized by U.S. district court judges in Manhattan, the five banks must turn over information on taxpayers suspected of hiding money with two foreign banks, Switzerland’s Zurcher Kantonalbank (ZKB) and Bermuda’s the Bank of N.T. Butterfield & Son Ltd.

The IRS uses “John Doe” summonses to get information about possible tax law-breakers whose identities are unknown. The summonses were granted last week and Tuesday, said a statement from the U.S. Attorney for the Southern District of New York.

The five banks targeted are Citibank, Bank of New York Mellon Corp, JPMorgan Chase, Bank of America and the U.S. branch of Britain’s HSBC.

The five banks are not accused of wrongdoing. They held correspondent accounts for the two foreign banks that were used to do transactions in U.S. markets, the statement said.

“These John Doe summonses for correspondent account records show our determination to pursue evaders using offshore accounts even if the person hiding money overseas chooses a bank that has no offices on U.S. soil,” said Daniel Werfel, the acting Internal Revenue Service commissioner, in a statement.

Representatives from both ZKB and Butterfield could not be reached for comment after normal business hours on Tuesday. Both banks have previously held secret bank accounts for Americans who were evading taxes, prosecutors said.

As part of a tax-evasion crackdown, the IRS has a voluntary disclosure program that allows Americans to come clean about money hidden abroad and pay penalties to avoid prosecution.

Through this program, U.S. taxpayers have disclosed 371 accounts at ZKB and 81 accounts at Butterfield, the IRS said.